With whose money are you paying? Your money or your uncle's money? If it is your uncle's money then there needs to be a paper trail showing where that money went to for they will want to look over his finances for 5 years. I don't know why you are paying a caregiver under the table or then you are missing the opportunity to take some of that off on taxes as a medical expense. Plus, you are enabling this person to earn money without having to pay taxes on it which is not legal.
Yes.... great answer. Enabling.... people to be dishonest. Sometimes...others cannot be dishonest because others refuse to be. BE that person. I was wondering... whose idea was it to do this "under the table"? The caregiver? If they did, because they are the ones really benefiting from it.... well.... not really. JUST DISHONESTY... FRAUD...STEALING....SS is not being taken out so she will have less SS when she retires.. that is, if she does. She may not have any SS when it comes time for her to retire and whose fault is that?
Not only are you committing tax fraud, but "gifting". Without proof you are spending his money for his care, the government assumes it is being gifted. If your paid caregiver falls or CLAIMS to fall in your or your uncle's home the caregiver can sue that estate.
Ironically, your under the table payments will make your uncle's care needs and expenses look less than they are. How will you explain that all of these care hours which have to date been free of charge are suddenly essential and so expensive? And if you've been using your uncle's money to pay the caregiver, how will you explain the gap in his funds?
How long have you been employing this person? I'm hoping it won't be so long that the situation will be impossible to retrieve.
I don’t know how it will affect the application as others said it will depend on who’s money you used. If the IRS somehow finds out, you will be putting a lot more money out. Their state and federal tax share (because they can turn around and say they thought you were taking it out of their pay, a you said, they said situation) You will have to back pay your share (as the employer) of Medicare and Social Security on what you payed them. In some states you have to purchase a workman’s comp policy. We looked at paying on our own and decided in the end to use a agency. Less paperwork, plus hopefully they have a back up person.
Actually the IRS makes the employer pay the entire 15.6% for social security and Medicare if they get caught cheating.
It is not a smart move to steal from the federal government, they can make it very painful for the employer, this is to discourage people from doing these things.
Well... I read some of the comments... and they are RIGHT. Paying under the table.... wrong. I have been a caregiver for 25+ years and people have tried to get me to be paid "under the table" but I refuse. I will NOT work for someone like that simply, whey they are dishonest in that respect, they will be dishonest with anyone in any respect, including me. Why would I want to work for someone like that? Also... they may not be considering this...they will NOT receive any social security on that money either because SS was NOT taken out of their paychecks and then when the time comes to collect SS, they will be the first to complain, "How can I be expected to live on THAT?" And the reverse is true... why would you hire someone you KNOW to be dishonest to take care of your uncle? No telling what they are doing when you are not around? And when it comes time that you are caught, she will say that this was YOUR idea..or... she did NOT know that SS and income taxes were not being taken out... who knows what she will come up with! (But then, how did she NOT know when she knows how much she makes per hour and how many hours she works.... that excuse will NOT fly) Learn a hard lesson... the more you lie, the harder it is to keep up with those lies. I hope she has not been working for you very long. Please... find someone who has integrity and be that yourself, too.
Yes, it will be a problem! Medicaid has a look back period, in Missouri it is five years. So you will have to account for all "transfer of assets" for the five your prior the date you made application to Medicaid. What you need to do is see a Elder Law Attorney and make a Caregiver Contract, so that payment won't be a problem when you apply for Medicaid.
Making a lot of assumptions. If OP is paying (and she did say, "I Pay"), Medicaid does not look at her money. If he meets income and assets test, and has Dr. support, he will get Medicaid. They will not care if she paid, she provided care, whatever.
I do not agree with paying people off the books, but it takes a leap to assume that there will be a problem, unless we know more facts.
If you personally pay a caregiver, then no it has nothing to do with his application. Your income is not figured in even if u live together.
Medicaid will look at his monthly income. There is a cap, I think its $2200 in my state. If he is over that, there maybe a way around that if ur State has a Miller Trust or something similar. The monies over the cap go into the Trust and when the person dies, it reverts back to Medicaid.
You don't even mentionvthe caregiver in the application if you have been paying. If asked how he has been cared for up to that point just tell them you have handled that. It has not come out of his income.
If your paid caregiver falls or CLAIMS to fall in your or your uncle's home the caregiver can sue that estate.
How long have you been employing this person? I'm hoping it won't be so long that the situation will be impossible to retrieve.
And he has not paid you, under the table for room and board? You may need an elder law attorney to sort this all out.
It is not a smart move to steal from the federal government, they can make it very painful for the employer, this is to discourage people from doing these things.
I do not agree with paying people off the books, but it takes a leap to assume that there will be a problem, unless we know more facts.
Medicaid will look at his monthly income. There is a cap, I think its $2200 in my state. If he is over that, there maybe a way around that if ur State has a Miller Trust or something similar. The monies over the cap go into the Trust and when the person dies, it reverts back to Medicaid.
You don't even mentionvthe caregiver in the application if you have been paying. If asked how he has been cared for up to that point just tell them you have handled that. It has not come out of his income.